Reverse Mortgage Legislation Update From NRMLA

President Bush signed into law a continuing resolution (H.J. Res. 20) on February 15 that funds most of the federal government thru 9/30/07, and “suspends” the HECM cap until then, as well.

For a short period of time, the Federal Housing Administration (a division of the U.S. Department of Housing and Urban Development) ran out of authority to insure new reverse mortgages (aka Home Equity Conversion Mortgages) because the statutory cap of 275,000 loans had been reached. H.J. Res. 20 suspends the cap until the end of the current fiscal year so that a more permanent solution can be reached.

Addressing the NRMLA Western Regional Meeting in Newport Beach, Calif. on February 22, Joe Bates, Director of HUD’s Santa Ana Homeownership Center, reaffirmed the Department’s commitment to seek Congressional approval of an FHA modernization bill that would eliminate the cap entirely, implement a single national loan limit, and create a HECM for Home Purchase feature.

Last year, the House of Representatives passed an FHA modernization bill, but the legislation failed in the Senate. At a recent budget briefing, HUD officials were hopeful that Congress would re-introduce a modernization bill later this spring.

This entry was posted on Friday, March 2nd, 2007 at 4:09 pm and is filed under Reverse Mortgage News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.